Car dealer Stephen Gilchrist has sold Ford, Chevrolet, GMC and Ram pickups in Texas truck country for more than two decades.

His rule of thumb was: "A Ford guy is a Ford guy, a Chevy guy is a Chevy guy and a Ram guy is a Ram guy," he said.

Not anymore.

“I’ve had more people call me looking at Ram for the 12-inch infotainment screen or looking at GMC for the MultiPro tailgate," said Gilchrist, dealer operator of Gilchrist Automotive in Dallas-Fort Worth. "It’s the most I’ve seen people willing to jump from brand to brand and it’s for these unique features rather than the payload and towing ability."

The 2019 RAM 2500 Power Wagon infotainment at the 2019 North American International Auto Show held at Cobo Center in downtown Detroit on Monday, Jan. 14, 2019.(Photo: Romain Blanquart, Detroit Free Press)

The intense competition in the Detroit Three's Truck Wars has led to deep discounts, an unusual move given that two of the three have redesigned pickups out. Typically, automakers resist markdowns on newly designed vehicles because such rebates erode profits.

But in a frenzied fight for a piece of the highly profitable pickup segment, and with Ford's F-Series secure as the top seller, General Motors' Chevrolet Silverado and Fiat-Chrysler's Ram are jockeying for the No. 2 slot. That means Detroit automakers appear willing to keep using price cuts to lure new consumers, dealers say.

Second-quarter sales

Fiat Chrysler released its second-quarter sales Tuesday. Sales of the Ram rose nearly 38.5% to 179,454 in the quarter compared with the same period a year ago. That makes Ram the second-top selling pickup in the United States behind the Ford F-Series, which has been the leader for 42 years.

The Ram this year has led the Chevrolet Silverado, which had historically held the No. 2 spot. Ram has been beating Chevy every quarter this year. Ford reports its second-quarter sales Wednesday.

GM reported Tuesday that Silverado quarterly sales tumbled 9% to 155,529 and sales of the GMC Sierra slid 4.3% to 56,857 in the second quarter compared with a year earlier.

Through June, Ram sales are up 28% to 299,480, but Silverado sales are down 12.2% to 255,463.

“Ram has pulled out a lot of stops with incentives to grab market share — and it’s working — while Silverado is disadvantaged in launch mode," said Michelle Krebs, executive analyst for AutoTrader. "Still, the new Ram 1500 has garnered critical acclaim, and the brand has been on an upward trajectory in terms of reputation."

For the automaker's total sales year-to-date, FCA reported a dip of 2% to 1.1 million vehicles compared with the first half of 2018. GM reported a 4.2% decline in total sales to 1.4 million vehicles sold..

Among other automakers reporting sales Tuesday, Nissan Group, which includes its luxury brand Infiniti, reported year-to-date sales down 8.2% to 717,036. Likewise, Toyota Motors North America, which includes Lexus, reported its sales through June down 3.1% to 1.15 million. Subaru reported its sales are up 5.2% to 339,525 through June. American Honda reported, through June, its sales dropped 1.4% to 776,995.

GM isn't going down without a fight, telling Reuters last week, “We will defend our franchise and we will do it the right way,” said Barry Engle, head of GM’s North American operations.

Ford reports its quarterly sales Wednesday. But data from Cox Automotive show that through May, the F-series has dominated sales over GM and FCA pickups and sold for a higher price. The average transaction price of the Silverado was $48,498 in the first five months compared to $49,182 for the Ram. The F-Series brought in $52,227, said Cox.

Ford's truck manager told Reuters that GM's and FCA's heavy discounting of newly designed pickups is "unprecedented" and while Ford will defend its top spot, it won't sacrifice profits.

The battling Ram

During the past month, many dealers have offered up to 30% off the list price for Ram, Chevrolet Silverado, GMC Sierra and Ford F-series, Reuters reported. GMC touted June as “Truck Month" in its advertising, a wink to consumers that price cuts lay ahead.

Gilchrist said at the end of June, he was offering a 20% discount on the list price of 2019 Ram 1500 pickup.

Market research firm JD Power said discounts on light-duty pickups last month averaged $5,250, 11% higher than the year-to-date average of $4,726.

In June, according to an analysis by Cox Automotive Rates & Incentives, each of the Detroit Three offered significant guaranteed cash incentives to help move their full-size pickups. Ram led with an average guaranteed cash incentive of $4,198. Ford average guaranteed cash is lowest at $2,412, and Chevy is in the middle at $3,377 on the Silverado.

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The Cox analysis shows Ford and Ram offering slightly less than they did in June 2018. But Chevrolet nearly doubled the amount of guaranteed cash offered compared with June of last year.

But Ram is not letting up, said Cox, which reported that during the lead-up to the long Fourth of July weekend, Ram has been offering aggressive deals of 15% to 20% of the sticker price on pickups. Until now, only GM brands were focused on percentage off sticker-type deals, said Cox analysts.

Importance of pickups

Pickup sales are crucial for the Detroit automakers. GM, for example, needs to deliver about $10 billion in free cash flow, a measure of how much cash GM generates after accounting for capital expenditures, in the remaining quarters to hit its full-year target. That's challenging as consumer demand sputters and sales are plummeting in China, the world's largest car market.

Analysts say throwing too much cash on the hood to chase a sales ranking is less important than maintaining profit margins.

A Chevrolet Silverado full-size pickup truck is ready to roll off the assembly line Wednesday, June 12, 2019 at the General Motors Flint Assembly Plant in Flint, Michigan. GM announced today it will invest $150 million at the plant to increase production of the all-new Chevrolet Silverado and GMC Sierra heavy-duty pickups, which begin shipping to dealers this week. (Photo by Jeffrey Sauger for General Motors)(Photo: Jeffrey Sauger, Jeffrey Sauger for General Motors)

"It is not crucial for Silverado to be No. 2," said AutoTrader's Krebs. "What is crucial is for GM to make as much profit as possible on its pickup trucks as it invests in future technologies like electric vehicles, autonomous vehicles and mobility services. Today’s sales and profits will fuel the future and GM has aggressive plans."

Engle said Silverado sales numbers, in part, reflect an effort to build more higher-margin Sierras aimed at buyers willing to spend more on a luxury truck.

But having more of the high-volume, lower-priced models in the mix will spike Silverado sales, dealers and industry observers said.

According to CarGurus, shopper interest in the Silverado 1500 took a dip in May, but the Ram Classic has had consistent interest through the year. It said interest in the Ram 1500 spiked around the time the Silverado started to dip, and affordability was a driving factor in its results.

"Ram's higher interest levels and increased sales numbers are lifted by both the addition of the affordable Ram Classic trim, as well as the technology in the other Ram trim levels such as the 12-inch infotainment screen and safety features such as drive lane assist and smart cruising," said George Augustaitis, CarGurus director of industry analytics.

Dealer deals

At George Matick Chevrolet in Redford, demand for the 2019 Silverado is strong, said General Sales Manager Sam Vitale. Most customers buy the crew cab and LT crew cab variants on 24-month to 36-month leases with a price tag in the high $40,000 to low $50,000 range.

Competition against Ram is fierce, said Vitale, but Matick has won some business from former Ram owners. In June, Matick Chevrolet sold about 50 of the new body-style 2019 Silverado pickups, which Vitale said will incrementally increase each month. It has about 250-300 pickups in inventory and in-transit as of July 1, said Vitale. He did not have June 2018 sales available for comparison.

Dealer Operator Paul Zimmerman stands with the Chevrolet Silverado pickups he has in stock at George Matick Chevrolet in Redford.(Photo: Ryan Esler)

Vitale said that GM has assured dealers it will maintain its incentives. To beat Ram, he said, GM must offer broad incentives across all eight trim levels.

“What we’re most excited about is GM putting the incentives on the crew cabs now,” said Vitale. “We always had our best deals on the double-cab pickups, so having that incentive on the crew cab, which has the bigger back seat, is how we’re best going to compete.”

Gilchrist said he believes Ford, Ram, Chevrolet and GMC are still wrestling with the right incentive play. Ram has been "very aggressive," he said. Meanwhile, the Silverado and Sierra are "incredible trucks," but Gilchrist has had trouble getting the right inventory levels and mix of trims to be competitive.

Gilchrist said GM has assured him the production mix is fixed, so, "Now it’s just getting them in stock," he said.

Until then, he's adjusting to the new world of Truck Wars where brand loyalty is as swift as the next big spiff.

“It’s an interesting time to be a truck dealer," said Gilchrist. "Ram’s going to continue to be aggressive, GMC and Chevrolet will get their inventory mix fixed and Ford will stay on their game. So it’s a good time to be in the truck market as a consumer.”